Electric vehicles (EVs) are now a viable, everyday mode of transport for millions of users, offering many benefits to individuals and businesses alike. But what about the costs? Are they more expensive to insure than traditional, fossil fuel-based cars and does that extra cost offset any of the other benefits associated with EVs such as lower running costs and more environmental security?
Generally speaking, yes, they are. That might not always be the case as insurance companies are still figuring out the basics when it comes to EVs. We’re still in the early days. Right now, however, while there are many advantages to electric cars, they are more expensive to insure for several reasons.
Insurance is a model that works on precedent. It tracks data from the past and uses that to determine the probability of accidents in the future. If it deems an accident more likely, insurance premiums will be higher whereas if it deems an accident less likely, they will be lower. The problem with EVs is that there is very little historic electric car data for them to work from. The more time that passes and the more data is gathered, the more insurance companies will begin to realise how safe EVs are and the more the costs will start to come down.
While there is a developing national infrastructure in place for electric charging, the vast majority of EV owners will be doing most of their charging at home and that requires the installation of a home charger. This must be factored into the insurance policy and, right now, that is complicated legal ground for many unfamiliar with the specifics of EV charging.
Research has shown that electric cars are less likely to be stolen and if they are stolen they are more likely to be recovered due to their limited range. This is something that will have an impact on premiums in the near future.
Manufacturers and mechanics are also learning all the time how to better fix EVs and as there are fewer working parts to deal with, in the long run they will probably end up being a lot cheaper and faster to fix than petrol and diesel cars.
The gap is shrinking. So, while today it might be more expensive to insure, your electric car will soon become the more affordable car in your garage, particularly if you take advantage of multi-car insurance, if you have more than one vehicle. Indeed, more and more specialist electric car insurance firms are popping up by the month.
In short, if you’re on the fence about going electric, don’t let the cost of insurance put you off electric cars. Because as demand for EVs begins to soar in the lead up to the banning of fossil fuel cars in 2030, prices will start to do likewise. Our advice then? Get in on the ground floor right now and be an electric leader rather than a follower.